August Technology Reports Record Orders and Revenues for Fourth Quarter 2003.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Feb. 11, 2004 New front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. applications and defect analysis (programming) defect analysis - Using defects as data for continuous quality improvement. Defect analysis generally seeks to classify defects into categories and identify possible causes in order to direct process improvement efforts. solutions drive record year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. August Technology Corporation (Nasdaq:AUGT), a leading provider of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. inspection solutions for the microelectronic The miniaturization of electronic circuits. See chip. industries, today reported record revenues of $14.3 million during the fourth quarter ended December December: see month. 31, 2003, an increase of 23% from the previous quarter and 127% from the fourth quarter of 2002. During the last three months the Company achieved all milestones under its joint development program (JDP JDP Joint Development Program JDP J D Power & Associates JDP Paris, France - Issy Les Moulineaux (Airport Code) JDP Joint Defensive Planner JDP Junior Development Programme JDP Joint Development Plan JDP Jump-Diffusion Process ) with one of the world's top ten semiconductor manufacturers. Fourth quarter 2003 included recognition of remaining revenues related to the JDP. Gross margin in the fourth quarter was 53.3% compared with gross margin of 56.4% in the third quarter of 2003 and 53.6% in the fourth quarter of 2002. The gross margin decrease during the fourth quarter of 2003 was due primarily to the recording of additional provisions for inventory obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. . The Company's net income of $0.06 per share compared favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with net income of $0.02 per share in the third quarter of 2003 and a net loss of $0.16 per share in the fourth quarter of 2002. Other highlights: -- Revenues increased for the fifth consecutive quarter. Full year revenues grew 61% over 2002. -- Fourth quarter orders increased 32% resulting in the sixth consecutive quarter of book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can above parity parity or space parity, in physics, quantity that refers to the relationship between an object or process and the image that it can produce in a mirror. and a record backlog of $19.1 million. -- AXi front end inspection system orders received from repeat customers and a new integrated device manufacturer See IDM. who also ordered two VersaScopes, the Company's recently introduced defect defect - bug review system. -- All-surface inspection was introduced with the shipment of the Company's first edge inspection demonstration system. -- Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has grew approximately $8.5 million during the fourth quarter including cash generated from operations of $1.8 million. Cash generated from operations during 2003 was $3.8 million. Revenues increased 61% in 2003 to $40.3 million compared to $25.1 million in 2002. Gross margin in 2003 was 54.6% compared to 55.8% in 2002. The Company's net loss per share decreased to $0.16 per share in 2003 from $0.69 per share in 2002. "Fourth quarter revenues were driven by increases in new NSX NSX New Sportscar eXperimental (concept name for Acura vehicle; originally NS-X) NSX Namespace Extension (Windows Shell Programming) NSX N Syndrome NSX Network and Security Experts NSX New Sports Experimental and AXi sales for front-end applications including final inspection in outgoing quality control," commented Jeff O'Dell, August Technology's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our business expansion, which resulted in record revenues, orders and backlog, along with profitable, cash generating operating results, has been primarily driven by the successful penetration of new front-end applications. We now offer the broadest line of advanced macro defect inspection systems in the industry, spanning front-end wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. processing through final device manufacturing applications. We complement this detection capability with new defect analysis solutions that allow our customers to more quickly and thoroughly understand their manufacturing processes, enabling them to drive down their cost of operations and speed time to market with next generation devices." O'Dell concluded, "We believe this new product momentum and our record backlog supports our expectation for further revenue growth of 5-10% in the first quarter of 2004." August Technology will provide a live conference call with senior management, today at 10:00 a.m. CT to discuss fourth quarter and 2003 year-end financial performance. If you would like to participate, please call 913-981-5508 prior to the 10:00 a.m. start time and use participant code 508567. A webcast of the conference call will also be available live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the on August Technology's web site at www.augusttech.com and archived for replay shortly following the call and continuing through February February: see month. 25, 2004. To listen to the call live, visit the web site at least fifteen minutes beforehand to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. About the Company: August Technology's automated inspection and defect analysis solutions provide critical product and process enhancing information, which enable microelectronic device manufacturers to drive down costs and time to market. Based in Bloomington, Minnesota Bloomington is a city in Hennepin County, Minnesota, and a southern suburb of Minneapolis. As of 2005, it had a population of 84,347, making it the largest Twin Cities suburb, and the fifth largest city in the state[1]. , August Technology is a founding member of the Advanced Packaging and Interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. Alliance (APiA) and an active member of the Die Products Consortium (DPC DPC Department of Premier and Cabinet (Victoria, Australia) DPC Dutch Power Cows DPC Deferred Procedure Calls (Microsoft Windows NT 4. ). Additional information can be found by visiting August Technology's web site at www.augusttech.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This release contains forward-looking statements regarding projected first quarter 2004 revenues, potential customer and market interest in our tools, expectations that our product will drive down customer costs and time to market, and acceptance of our new visual inspection solutions including the AXi Series, EXi Series and VersaScope. These forward-looking statements involve risks and uncertainties which may cause actual results to differ from those set forth in the forward-looking statements, including, but not limited to: (i) no continuing improvement, or a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in general economic conditions and in the semiconductor and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. microelectronic industries; (ii) pre-order sales activities not resulting in orders, or customers delaying or canceling orders in backlog; (iii) loss of potential sales to competitors based on pricing, product features or other factors; (iv) lack of customer acceptance in the upcoming quarters of the Company's newer products including the AXi Series, EXi Series, 3Di Series, NSX-105, VersaScope or new YieldPilot enhancements that were or are planned to be shipped to them; (v) failure of our recently completed and current product development efforts to meet customer needs and expectations including driving down their costs and time-to-market; (vi) unanticipated costs and expenses which increase operating costs operating costs npl → gastos mpl operacionales ; and (vii) failure to continue to effectively integrate the recently acquired businesses of STI STI systolic time intervals. and CSI CSI Crime Scene Investigator CSI CompuServe, Inc. CSI Commodity Systems, Inc. CSI Commodity Systems Inc. (Boca Raton, FL) CSI Crime Scene Investigation (CBS TV show) CSI Christian Schools International and their product lines to enhance our product offering. Please refer to additional risk factors stated in August Technology's Prospectus with respect to its recent public offering (filed with the Securities and Exchange Commission (SEC) on September 24, 2003 pursuant to SEC Rule 424(b)(4)) and Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the SEC on March 4, 2003. August Technology does not assume any obligation to update the forward-looking information contained in this press release.
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Years Ended
December 31, December 31,
------------------ ------------------
2003 2002 2003 2002
--------- -------- -------- ---------
Net revenues $14,318 $6,295 $40,323 $25,058
Cost of revenues 6,687 2,920 18,290 11,068
--------- -------- -------- ---------
Gross profit 7,631 3,375 22,033 13,990
Selling, general and
administrative expenses 4,131 3,007 14,105 11,769
Research and development expenses 2,633 2,636 10,430 9,847
Restructuring expenses (1) - - 254 1,244
--------- -------- -------- ---------
Operating income (loss) 867 (2,268) (2,756) (8,870)
Interest income 159 118 407 624
--------- -------- -------- ---------
Income (loss) before provision
for income taxes 1,026 (2,150) (2,349) (8,246)
Provision for income taxes (2) - - - 687
--------- -------- -------- ---------
Net income (loss) $1,026 $(2,150) $(2,349) $(8,933)
========= ======== ======== =========
Net income (loss) per share:
Basic $0.06 $(0.16) $(0.16) $(0.69)
Diluted $0.06 $(0.16) $(0.16) $(0.69)
Weighted average shares
outstanding:
Basic 17,171 13,130 14,381 13,033
Diluted 18,291 13,130 14,381 13,033
(1) Restructuring expenses include the following items for the periods
indicated:
For the year ended December 31, 2003: $254 of employee severance
costs.
For the year ended December 31, 2002: $459 for the write-off of
acquisition costs, $427 of distributor termination costs and $358
of employee severance costs.
(2) Due to the level of historical operating losses, the Company has
sufficient deferred tax assets to offset the level of income taxes
on the pre-tax income for the third quarter of 2003. As a result,
the Company did not reflect a provision for income taxes during
the period. The Company initially recorded a full valuation
allowance against deferred tax assets in the second quarter of
2002, resulting in a provision for income taxes rather than a tax
benefit on the pre-tax loss during the period. The Company has
continued to provide the allowance due to uncertainty as to the
extent of profitability in future periods.
AUGUST TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
2003 2002
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $10,027 $1,895
Short-term marketable securities 43,528 15,438
Accounts receivable, net 4,094 7,054
Inventories 11,651 7,432
Inventories at customers under purchase
orders 2,293 1,012
Prepaid expenses and other current assets 1,631 1,091
------------ ------------
Total current assets 73,224 33,922
Property and equipment, net 3,141 3,439
Purchased technology, net 1,179 -
Long-term marketable securities 10,295 1,444
Other assets 1,108 705
------------ ------------
Total assets $88,947 $39,510
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,409 $2,273
Accrued compensation 1,146 554
Accrued liabilities 1,414 451
Customer deposits & deferred revenue 2,436 1,268
------------ ------------
Total current liabilities 10,405 4,546
Other non-current liabilities 65 97
------------ ------------
Total liabilities 10,470 4,643
------------ ------------
Shareholders' equity:
Common stock, no par value 88,086 42,158
Undesignated capital stock, no par value - -
Deferred compensation related to stock
options (49) (105)
Accumulated deficit (9,578) (7,229)
Accumulated other comprehensive income 18 43
------------ ------------
Total shareholders' equity 78,477 34,867
------------ ------------
Total liabilities and
shareholders' equity $88,947 $39,510
============ ============
Total cash and marketable securities $63,850 $18,777
AUGUST TECHNOLOGY CORPORATION
SELECTED CONSOLIDATED STATEMENT OF CASH FLOWS DATA
(In thousands)
(Unaudited)
Years Ended December 31,
----------------------------
2003 2002
-------------- -------------
Cash flows from operating activities $3,847 $(6,514)
Cash flows from investing activities (39,478) 5,727
Cash flows from financing activities 43,766 1,162
Effect of exchange rates on cash and cash
equivalents (3) (3)
-------------- -------------
Net increase in cash and cash equivalents $8,132 $372
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